The Hiccup and Hope:
March 2024 closed on a high note for Ethereum (ETH) as the price surged to $3,646.8, marking an impressive 11.8% growth. However, the abrupt downturn on April 2 threw the market into disarray, with ETH plummeting by 9% to hit a low of $3,215 by the week’s end.
Despite this hiccup, recent on-chain data suggests a glimmer of hope, indicating a potential major rebound in ETH price in April 2024.
The Exodus of Supply: A $1.2 Billion Exodus
Within the first six days of April 2024, Ethereum witnessed a 9% decline, currently hovering around $3,300 at the time of this report. Yet, a silver lining emerges from market movements, with investors showing renewed optimism over the past fortnight.
Crucially, on-chain data reveals a significant withdrawal of ETH from the market supply, hinting at a possible bullish reversal on the horizon.
Cryptoquant’s exchange reserves metric highlights a stark decrease in Ethereum held on exchanges, with a drop from 14.36 million ETH on March 19 to 13.99 million ETH by April 6. At the current price of approximately $3,330 per coin, this translates to an impressive $1.2 billion reduction in liquidity drained from the ETH market over the past two weeks.
With the laws of demand in play, this sudden scarcity in ETH could position the cryptocurrency for an explosive surge in price during the anticipated demand influx in April 2024.
Charting the Path: Challenging Resistance at $3,500
Leveraging insights from the $1.2 billion withdrawal, Ethereum is poised for a potentially parabolic rise towards $4,000 in April 2024. However, preliminary data from IntoTheBlock’s global in/out of the money chart suggests that bulls may encounter a formidable barrier at the $3,500 mark.
The chart indicates that 3.52 million addresses holding 6.14 million ETH will break-even as ETH nears the $3,535 territory. Any sell-offs from this cohort could exert downward pressure on ETH’s price rally.
Ethereum (ETH) Price Forecast | April 2024 | Source: IntoTheBlock
Nevertheless, with the market supply witnessing a substantial $1.2 billion contraction, ETH is primed to overcome this hurdle and set its sights on breaching the $4,000 threshold through the course of the month.
This article was originally posted on FX Empire
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